The Criminal Finances Act: What Every Contractor Needs To Know

Criminal Finances Act contractors

22nd June 2018

Here at 6CATS International, we’ve been investing a lot of time raising awareness of the Criminal Finances Act 2017 (CFA) since its introduction back in September 2017. While businesses who fail to adhere to the Act’s rules will face penalties, contractors could also be impacted. Consequently, it is vital that you understand how the Act may affect you and, more importantly, that you are paying tax in accordance with the law. You may already be familiar with it but, as a recap, here are the key things that you need to know.

An overview of the Criminal Finances Act

  • One of the key purposes of the Act is to make it easier to convict companies when they have failed to prevent the facilitation of tax evasion.
  • There are now two new corporate criminal offences: ‘failure of a company to prevent the facilitation of UK tax evasion by an associated person’ and ‘failure of a company to prevent the facilitation of non-UK tax evasion by an associated person’.
  • If tax evasion occurs and a company can’t prove it took steps to prevent the offence happening, it will be liable.
  • Claiming to be ‘unaware’ is not a defence. As a result, agencies are looking closely at the actions of both their employees and contractors, as well as taking greater steps to ensure that associated parties in the supply chain are operating compliantly.

What does this mean for contractors?

As companies face further demands to conduct the required supply chain due diligence checks to ensure that all parties are compliant, contractors will face a greater administrative headache. Expect, for example, to be asked for full details of any other providers that you use in a bid to ensure that you aren’t associated with any non-compliant suppliers. You can also anticipate greater checks designed to ensure that you aren’t evading tax, for example by being paid through offshore schemes or using companies that artificially inflate expenses in order to reduce payments.

As compliance law is a complex issue, many contractors are finding the additional measures and checks to be a time-consuming burden. At 6CATS, we are experts in international compliance law and are able to provide all of the professional guidance that you need. This will give you the peace of mind that comes with knowing that you are operating legally across the globe.

So, in order to ensure that you are compliant, partnering with a specialist international contractor management company is strongly advisable. Contact the team today.


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